'Golden ticket' visa for the rich fails to pay its way

Perth Now

a day ago

A special Australian visa for foreign investors who stumped up millions of dollars was scrapped because they paid less tax and added little economic benefit.
Right of entry, including for one investor who intended sinking at least $2.5 million and another who had twice that amount to spend, was discarded because the applicants were "more fiscally costly and contribute less to the economy than other skilled visas", according to previously classified documents.
Debate about the visa class was renewed before the federal election in May after video surfaced of then-opposition leader Peter Dutton being asked about the initiative at a fundraiser and saying, "I think we'll bring it back".
Labor attacked him over plans to reinstate the visa, with Home Affairs Minister Tony Burke branding it a "cash for visa" scheme.
The Business Innovation and Investment Program provides a pathway for entrepreneurs and investors to get permanent residence in Australia through several subclass visas.
There are four main streams of the subclass 188 visa as part of the program.
These include a significant investor stream for people planning to invest at least $5 million, an investor stream for people who can invest at least $2.5 million and an innovation stream for business owners with an annual turnover of at least $750,000 and $1.25 million in assets.
Home Affairs Department documents obtained under freedom of information laws previously protected under legislative secrecy reveal those on innovation and investment program visas paid less tax than other skilled migrants.
Despite the investment threshold, the average Business Innovation and Investment Program visa holder had a taxable income of just $25,000 compared to skilled migrants' $64,000, Grattan Institute analysis cited by the department determined.
A government review of the program found in 2019/20, "even after considering investment income, BIIP investors and significant investors still earned less income and paid less tax than other skilled visa holders".
"This level of income is less than expected given the level of investment required."
The Home Affairs Department noted Australia didn't have a problem attracting foreign capital and determined the visas were unlikely to generate significant levels of additional investment.
There was $5.385 billion in investment associated with more than 1000 significant investor grants from primary applications of the visa class between January 1, 2018 and December 31, 2022.
But this was a drop in the ocean of Australia's total foreign investment pool of more than $20 trillion.
Mr Burke scrapped the program on July 31, 2024 - just days after being sworn in as home affairs and immigration minister.
But 15,000 primary and secondary applications remained in the backlog as of February 9, 2025, despite more than 3000 people having withdrawn their applications after refund provisions were introduced in September 2024.
Only 23 withdrawals were from the significant investor stream and 40 from their dependents, meaning the significant investor and investor subclasses accounted for more than 3700 of the total applications.
Mr Burke issued a directive in February 2025 to intentionally throttle processing of the two investor visas by downgrading their priority in the line, behind the entrepreneur and business innovation streams.
The department said it was considering other options to manage the significant investor, including using laws to delay processing and removing the pathway to permanent residency.
But Mr Burke was warned sidelining the investor streams risked irking state and territory governments that weren't happy the visa had been scrapped because it would risk investment in key projects.
The opposition hasn't ruled out bringing back an investment visa in some form as it reviews its immigration policies after its election defeat.